Economic Growth

I.M.F. Independence Matters

  • By
  • Douglas Rediker,
  • New America Foundation
  • and David Gordon, Eurasia Group
April 17, 2012 |

The International Monetary Fund has been at the center of global financial stability since its creation after World War II. In the last year it has played a central role in reducing the risk of a European financial meltdown. At the fund’s spring meetings this week, the question of whether to bolster I.M.F. resources will dominate the agenda. Yet in reality the I.M.F. faces a much greater challenge that could render additional financing a sideshow: an erosion of market belief in I.M.F. financial analysis.

Private Empire

May 1, 2012

In Private Empire Steve Coll investigates the largest and most powerful private corporation in the United States, revealing the true extent of its power. ExxonMobil’s annual revenues are larger than the economic activity in the great majority of countries. In many of the countries where it conducts business, ExxonMobil’s sway over politics and security is greater than that of the United States embassy. In Washington, ExxonMobil spends more money lobbying Congress and the White House than almost any other corporation. Yet despite its outsized influence, it is a black box.

Economic Growth Program Releases New Report on Manufacturing

April 18, 2012

Washington, D.C. --  American policymakers are beginning to catch on: The domestic manufacturing industry is modernizing, and as a result transforming the economy.

The Real Bad Guy in the E-Book Price Fixing Case

  • By
  • Barry C. Lynn,
  • New America Foundation
April 12, 2012 |

This week, the Obama administration’s Justice Department struck a great legal blow against our open market for books, and indeed against open markets in America. Even though online retailer Amazon has captured more than 50 percent of many key book markets—like the one for e-books—antitrust enforcers brought suit not against this vast and swelling monopolist but against the publishers who are the victims of Amazon’s power.

Their supposed crime? To do what is most normal in any real market: insist on the right to price your own product.

The Pain in Spain

April 10, 2012

The eurozone crisis has re-emerged with rising borrowing costs in Italy and Spain and increasing concerns about the prospects for growth.

Arabs' Economic Malaise Demands Local Solutions

  • By
  • Afshin Molavi,
  • New America Foundation
April 2, 2012 |

Over the past year, the European Bank for Reconstruction and Development (EBRD) has added four new target countries to its mandate: Egypt, Jordan, Morocco and Tunisia. The development body founded in the aftermath of the 1989 European revolutions and the end of communism has been investing across eastern and central Europe and Central Asia and the Caucasus for two decades - with measures of success.

Creating Financially Capable Communities at Home in DC and across the US

April 10, 2012
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Yesterday’s President’s Advisory Council on Financial Capability meeting sharpened the case for making financial capability building a top priority in the US.  Treasury Deputy Secretary Neal Wolin set the stage by stating that, “The economy is regaining momentum.  But we still have more work to do to repair the damage caused by the worst financial crisis in our lifetimes.”  A following panel disc

The Sidebar: The U.S. Budget and Community WiFi

April 6, 2012
The U.S. Budget and Community WiFi are topics for discussion this week, as host Pamela Chan is joined by Preston Rhea and Jason Peuquet.
Programs:

Land of Promise

April 17, 2012

From one of America’s leading intellectuals comes a sweeping and original work of economic history, recounting the epic story of America’s rise to become the world’s dominant economy.

How the Rich Get Richer

March 27, 2012
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Over the last several years, we’ve taken a long look at the state of inequality in America and its changing dynamics. While many focus on the distribution of income, I think it’s instructive to also consider the distribution of wealth. Wealth, unlike income, can be inherited passively, but we also know that wealth actively generates income. And here a new article by Steven Rattner, former White House Auto Czar and New America board member, that focuses on how this is increasingly the way the rich are getting richer.

Drawing on a new analysis of tax returns by the esteemed economists Piketty and Saez, Rattner explains how an overwhelming amount of income gains since the Great Recession have been captured by the very top.

In 2010, as the nation continued to recover from the recession, a dizzying 93 percent of the additional income created in the country that year, compared to 2009 — $288 billion — went to the top 1 percent of taxpayers, those with at least $352,000 in income.

Still more astonishing was the extent to which the super rich got rich faster than the merely rich. In 2010, 37 percent of these additional earnings went to just the top 0.01 percent, a teaspoon-size collection of about 15,000 households with average incomes of $23.8 million. These fortunate few saw their incomes rise by 21.5 percent.

The bottom 99 percent received a microscopic $80 increase in pay per person in 2010, after adjusting for inflation. The top 1 percent, whose average income is $1,019,089, had an 11.6 percent increase in income.

What is particularly significant here is how this pattern diverges from past recoveries. During the expansion of the 1990s, 45 percent of income gains went to those at the top. This increased to 65 percent during the Bush recovery. And now we are up to 93 percent. It is an astonishing figure that undercuts our collective aspirations for shared prosperity.

Tax policy certainly plays a major role here and should get additional scrutiny. In 2001 and 2003, we lowered the tax rates at the top and on capital gains and dividends. This is how the very rich got to have significantly lower marginal tax rates than everybody else. It is why Warren Buffet's secretry got a shoutout in the State of the Union. But at the end of the year, these tax policies are scheduled to expire. If Congress does nothing, everything goes back to the Clinton-era levels. Given the partisan divide, perhaps the do-nothing scenario will come to pass, and remake both our tax rates and our fiscal policy outlook. But team Obama has proposed a reset only for the rich, and this is the kind of data that will undoubtedly strengthen their case to do so.

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